Condominium associations, cooperatives, and homeowners’ associations are all required to maintain and make available to owners official records of the association. The respective statutes governing each type of association contain a list of records that must be maintained by the association, as well as a catch-all provision for “all other written records of the association.” Association counsel should be consulted if the Board has any doubt about whether something constitutes an official written record of the association that needs to be maintained and/or be subject to inspection. Although the requirement may seem simple enough, issues arise, for example, distinguishing between association emails and those that belong to a director as an individual.
Association records must be kept either for one year, seven years, or permanently, which is also set forth in the respective statutes for each type of association. For example, a copy of the developer’s plans, permits, warranties, other items; a copy of the recorded declaration of condominium and all amendments; a copy of the recorded bylaws and all amendments; a certified copy of the articles of incorporation and each amendment; a copy of the current rules; and a book contains all meeting minutes, both board and member meetings, must all be kept permanently. Meanwhile, bids for work to be performed or for materials, equipment or services, as well as all records from an elections (e.g., ballots, sign-in sheets, proxies, etc.) must be maintained for one year. Everything else that is considered an official record of the association must be maintained for at least seven years.
Good record keeping is important of any corporation. For associations, it is also important because the official records are open to inspection by any association member or their authorized representative and must be made available within ten working days after receipt of a written request. Finding minutes from ten years ago is much easier if the records are well-organized. There are a number of ways the association may make the records available for inspection. The association may have the records available to the owner on site by having the owner come to the association office or a conference room. The records can be in physical printed form, however, if the association has digitalized its official records, the owner has the option, at their discretion, to review the records in electronic format on a computer screen. If the association so chooses, it may e-mail them. However, a common misconception is that the association is required to send or e-mail records to the requesting owner. The association is not obligated to send the records, only to make them available for inspection. The association may be more liberal with its policy and send out records, but it is not a statutory obligation. The right to inspect the records also includes the right to make or obtain copies, at the owner’s reasonable expense. A unit owner may make a photocopy with his or her cellphone. In such an instance, the association could not charge for the copies.
Another issue with disorganized records is that certain records are not accessible to unit owners and need to be excluded from the inspection. For example, records protected by the lawyer-client privilege and personnel records of association or management company employees are two types of records that unit owners cannot access. If the association is allowing an owner to come to the office to inspect requested records by sifting through a file cabinet or boxes, an association representative needs to ensure that those excluded records are removed from the file or box. Again, a well-maintained record keeping system makes this much easier.
In addition to a good record-keeping system, the association should consult with counsel to set up a written policy for the handling of inspection requests. The statute specifies that the association may adopt reasonable rules regarding the frequency, time, location, notice, and manner of record inspections and copying. The association, however, cannot require a member to demonstrate a purpose or state a reason for requesting to inspect certain records. Setting forth a written policy allows the association to fulfill the requests in the statutorily required time frame without such requests disrupting the operation of the association office or interfering with the other duties of association staff or the board itself. Such a policy can address the many issues that arise during these inspection requests. For example, does the association have a rule as to how owners need to request records? If not, is an e-mail sufficient? Is a verbal request sufficient? Or, for those requests that consist of a significant number of records, the association may want to include a rule for a reasonable amount of time per day the owner can spend inspecting the records. Without a written formal policy, the association cannot enforce restrictions regarding access to records.
Consulting with counsel to put together a written policy for official records inspection can significantly simplify this statutory obligation for the Board, management and/or association employees, as well as protect the Association from owner claims of non-compliance. Owners are also better served by having a clear written policy of how to make their inspection requests and how their requests will be fulfilled.
To read the original FCAP article, please click here.
Karyan San Martano is a member of Becker’s Community Association practice and regularly provides legal counseling to the officers and directors, as well as the property manager, on the operation of condominiums, cooperatives, and homeowners associations.